Online GST to be decided by March

Consumers will know by next year on which items they’ll be paying GST.
Photo: Penny Stephens

by
Phillip Coorey | Chief political correspondent

Consumers should know by March on which overseas online goods they will be paying goods and services tax and by when.

State and federal treasurers agreed at a meeting in Canberra on Wednesday to lower the $1000 threshold at which the GST currently applies to imported goods from overseas.

The treasurers were presented with four options prepared by Treasury and agreed to make a final decision by March. One of the options was to phase down the threshold over time, starting at $500. Most of the treasurers were keen to move straight to a lower level, such as $20, and minimise the cost of collecting the extra GST by working to have it collected at point of sale.

Opposition: another broken promise

The federal government is amenable to the change, which is strongly backed by retail groups but fiercely opposed by consumer group Choice. After an initial neutral response, the federal ­opposition rounded on any such change to the GST, saying it would amount to another broken promise by the Abbott government.

A day after the government broke a key promise to honour Labor’s school funding arrangement with the states, shadow treasurer
Chris Bowen
said any change to the GST would breach the Coalition’s pre-election promise that there would be no changes to the tax this term of government.

Federal Treasurer
Joe Hockey
has dismissed this argument, saying lowering the $1000 threshold would be a tax integrity issue, not a structural change or broadening of the tax.

Prime Minister
Tony Abbott
was also open to the change but stressed the states would have to bear responsibility. “This is a matter for the states. The GST is essentially a state tax," Mr Abbott said.